LOS ANGELES (Reuters) - Getting Hollywood actors paid for their smallest performances -- video clips on the Internet -- is shaping up as one their biggest sticking points in stalemated contract negotiations with major studios.

Whether actors must give consent for snippets of their film and TV work to be displayed online, and how much they should earn for them, was the No. 1 disputed issue cited by the Screen Actors Guild after labor talks broke down last Tuesday.

Studios want to freely distribute YouTube-style clips of old TV shows and movies without seeking actors’ permission and pay them a flat fee rather than bargain on a price with each performer individually.

The actors’ union staunchly opposes that move.

“What they’re asking us to do is erase 50 years of our customs and practice,” SAG President Alan Rosenberg said in a recent interview.

The debate is the latest example of how the economics of traditional media are being upended by the growing popularity of video-sharing Web sites like YouTube, and how audiences’ tastes and habits are being transformed in the process.

The bulk of what they see consists of homemade footage and unauthorized clips of TV shows and movies, some of it blended into video “mash-ups” like the popular “Brokeback to the Future” parody trailer poking fun at the “Back to the Future” movies and the gay cowboy romance “Brokeback Mountain.”

OLD RULES, NEW MEDIA

Studios and broadcast networks have long been free to use clips for promotional purposes -- as in traditional movie trailers and TV “promo” ads -- without paying the actors who appear in them anything extra.

But when reusing clips as entertainment, such as inserting outtakes or excerpts from one TV show into another, producers must get consent from every performer appearing in that clip and bargain with each separately on a rate of pay.

Under SAG contract rules originating 50 years ago, each performer in a clip must receive at least the “day-player” minimum of $759, even if the clip is just a few seconds long.

Those rules stood the test of time in the pre-digital era, but as companies seek to develop a “legitimate” market for clips to compete with the explosion of pirated footage on the Internet, studios say the old rules have become too onerous.

Instead, they are seeking a fixed payment to actors for re-use on the Internet in lieu of the bargaining process.

SAG says actors fear losing control over their images, especially when it comes to advertising and video “mash-ups.”

“We’re willing to help them build this new business, but they don’t take our concerns seriously,” Rosenberg said.

The studios argue that actors’ work already is widely exploited -- without their consent or compensation -- through Internet piracy, and that they only stand to gain from clips licensed or distributed by the industry.

“The enormous administrative burden created by (existing) rules ... allows a clips black market to flourish on its own -- with or without us,” the Alliance of Motion Picture and Television Producers, the studios’ negotiator, said last week.

The clips conflict is an issue unique to actors, one not addressed in the contracts settled this year with directors and striking screenwriters.

Labor talks between the studios and SAG are expected to resume at the end of this month. The existing contract covering 120,000 film and TV actors expires June 30.